II. STAGES OF GROWTH, CAPITAL FORMATION, AND THE ROLE OF THE STATE

Needless to say, Soviet planning presented empirical and theoretical challenges that had an enormous influence on the development of Western economics (see, for example, Ellman Reference Clark2009). This is well known and we shall not deal with this issue here, as our focus is on the impact of pre-revolutionary Russia as a fundamental case study. A good example of this is Paul Rosenstein-Rodan’s famous 1943 essay on the industrialization of eastern and southeastern Europe, one of the most influential contributions to the birth of development economics. In his text, Rosenstein pointed to the shortcomings of the “Russian model” (that is, Sergei Witte’s aim to achieve self-sufficiency for the empire of the czars by means of the simultaneous construction of all stages of industry) to make the case for an externally oriented type of industrialization, open to foreign investments—according to his proposal, the best way to develop the region of his interest (Rosenstein-Rodan Reference Lewis1943, pp. 202–211).

One of the main issues at stake in the twentieth-century debate was the role of the State as a modernizing force. As the early theoreticians identified capital formation as key in the economic development of societies that, by definition, were short of sources of it, the idea that the State could play a fundamental task in generating and mobilizing capital was almost inevitably considered. Among economists, this problem was still the source of doubts and ambivalence of the kind that we found in the previous century. This becomes evident in one of the early landmarks of development economics, Ragnar Nurkse’s Problems of Capital Formation in Underdeveloped Countries (1953), which engages in the “much debated issue” of “whether the forces of economic progress are to be deliberately organized or left to the action of private enterprise.” Nurkse acknowledged that this issue falls beyond the realm of the economic science: “the economist, as an economist, has no categorial imperatives to issue on this subject.” To what extent can the State intervene in the economy in contexts of backwardness? This question can be correctly answered only by assessing “the human qualities and motive forces existing in any particular society.” And here Nurkse reminds the reader of Jeremy Bentham’s “attitude of relativity in this regard” over a hundred years earlier:

The argument of the missing middle class and lack of individual initiative, so many times repeated in the nineteenth century apropos Russia, is not incidental: Nurkse, like Bentham, also mentioned Peter the Great’s reforms as an example.

The work of Walt W. Rostow is another good example of the importance of the Russian case in arguments on economic development. His position in the twentieth-century debate represents the crudest version of the linear, Eurocentric vision of economic development that nineteenth-century liberals had already established. According to his theory, all nations were supposed to pass through the same sequence of historical stages of economic development, which in turn was understood as industrialization and growth of per capita product. Thus, underdevelopment was considered as simply an earlier stage in this linear process. For this process to “take off,” capital formation was crucial, and a number of “preconditions” should be met, the most important of which was the presence of a “new leadership” in the country, strong and determined enough to remove the obstacles of “traditional” attitudes, particularly those of the “old land-based elite,” whose power and grasp on income above the minimum levels of consumption made it difficult to divert that income into the “modern” sector. As Rostow acknowledges in the Preface to his Stages of Economic Growth (1960), he came to this view by analyzing the historical trajectories of Britain, the USA, China, and Russia. However, the Russian case was fundamental in at least three respects. Firstly, Peter the Great’s policies are, chronologically speaking, the first example of the sort of “reactive nationalism” out of which the “new leadership” indispensable for modernization often emerged.Footnote ³ Indeed, Rostow dedicates a whole section to examining State policies in Russia from Peter the Great to the 1861 reforms and to Witte’s program of industrialization. By means of these examples, Rostow makes his case for the importance of modernizing elites in the overcoming of backwardness. Secondly, the Russian case is analyzed again at length in chapter seven, entirely devoted to comparing it with the trajectory of the USA. Here Rostow argues that both cases prove that, despite important and obvious national differences (among others, he mentions Russia’s “lack of a free-wheeling commercial middle class”), the sequence of stages of development is the same for all. In this “remarkable parallel,” nineteenth-century Russia was between thirty-five and fifty years behind America’s development, but nevertheless evolving towards the same direction. And this connects to the third respect in which the Russian case became fundamental in the debate on development: the interpretation of the Soviet path. Rostow argues there is nothing strange or mysterious about Soviet industrialization. In its basic evolution, the Soviet economy is following the general rule. Its current political organization—communism—is nothing but a temporary “disease of the transition.” In the course of its “take-off,” Russia was struck by a major war. In that particular situation, the precarious and changing “balance between traditional and democratic political elements collapsed in the face of defeat and disorder,” and the communists “took over control of a revolutionary situation” they had not created. They are now trying to exploit the resources opened up by Russia’s arrival at industrial maturity to “seek a radical expansion of Soviet power on the world scene,” something that can be easily prevented if the Western powers help the Third World to modernize (Rostow 1990, pp. 26–27, 65–67, 93, 98, 104–105, 162ss.). Thus, Rostow’s “non-communist manifesto” is aimed at countering the Marxists’ pessimism regarding chances of development for backward countries with an optimistic recipe for economic growth. This optimism required that Rostow “proved” that pre-revolutionary Russia was no different from currently developed countries, and that communism was nothing but a minor and ephemeral incident in the road to modernization.

III. RELATIVE BACKWARDNESS AND A FIRST CRITIQUE OF LINEAL THINKING

For similar reasons, the Russian case played an even more visible role in Alexander Gerschenkron’s thinking. In fact, his fundamental contributions to the debate on development can be seen as a long discussion of Russia’s historical trajectory as compared to that of the more advanced countries of Europe. Indeed, the diverse aspects of Russian and Soviet industrialization occupy the majority of his two main collections of essays, Economic Backwardness in Historical Perspective (1962) and Continuity in History and Other Essays (1968), while a third one is entirely devoted to analyzing the economic history of Europe in the Russian Mirror (1970).

Gerschenkron made use of the Russian case for a large number of arguments. The core of his approach was presented for the first time in the influential essay “Economic Backwardness in Historical Perspective,” published in 1952 as part of the collective volume The Progress of Underdeveloped Countries, edited by Bert Hoselitz. Contrary to the idea of a lineal path of development equal for all nations, Gerschenkron argues that

The Russian case casts light on these propositions as the example of industrialization in a situation of severe relative backwardness. In such a situation, Russia was forced to follow a path to industrialization different from that of countries where this process begun. The State played there a more important role in the economy than in England or in Germany, where entrepreneurs and banks, respectively, were the main engines of economic growth. The scale, orientation, and technology of Russian industries were also significantly different: firms tended to be larger and more capital-intensive than their English counterparts. Conversely, the role of agriculture for industrialization was less important in “latecomers.” Interestingly, Gerschenkron also finds correlations with non-economic aspects. Ruthlessness in the use of power and the pervasive presence of ideological constructs, according to his account, were not so much a feature of Russian cultural tradition as they were an outcome of the need to rapidly mobilize economic resources to catch up with the more advanced nations. For all these reasons, Russia’s history is marked by discontinuity, as opposed to the more smooth and lineal evolution of the countries that initiated the process of industrialization. In the collection of essays that carries the same title as this early text, Gerschenkron displays a vast knowledge of nineteenth-century economic thought, both in Russia and in the West, and draws some insightful comparisons. The influence of Mikhail Tugan-Baranovsky—“probably the most original Russian economist”—becomes particularly apparent (indeed, his Russkaia fabrika [1898], an heterodox Marxist analysis of the development of industry in a peripheral situation, contains in nuce some of Gerschenkron’s core hypothesis). He ends the volume by strongly criticizing Rostow on the grounds that he presents a lineal view of economic development that fails to notice the qualitative difference of situations of relative backwardness; Rostow’s emphasis in the need of certain “preconditions” for growth disregards the creativity of backward nations in profiting from the “advantages of backwardness” and in finding “substitutes” for missing elements (such as the Russian State’s fulfilling the role the bourgeoisie had played in England) (Gerschenkron 1962, p. 7).

The significance of the Russian case for the analysis of processes of economic development in general is further explored in other texts, particularly in Europe in the Russian Mirror, a summary of Gerschenkron’s views on this regard. From the very beginning of this book, he acknowledges that Russia’s awkward location within/without Europe has sparked a rich tradition of economic thought on paths of development in that country. By mentioning his own past as a student in a Russian gymnasium, Gerschenkron implicitly places himself as part of that tradition. By comparing Russia’s historical features with those of other European countries, Gerschenkron goes deeper in his critique of lineal thinking. After comparing Russian and Western economic doctrines and State policies from the seventeenth to the nineteenth centuries, Gerschenkron concludes that the predominance of more liberal or more “mercantilistic” approaches can be ordered in a West–East gradient involving all European cases:

The particularly State-oriented and coercive style that the industrialization process acquired in Russia from the times of Peter the Great is interpreted under this light; that is, not as a quintessentially “Russian” feature, but rather as the extreme case of the European gradient. As “nowhere else was the starting point so low” and the obstacles “so formidable,” nowhere else was the State to any comparable extent forced to act as a “demiurgos of economic development” (Gerschenkron 1970, 85–87, 71–73, 46). And here Gerschenkron presents the readers with a crucial paradox:

Gerschenkron was not at all a radical critic of liberalism, nor was his intention to present a pessimistic view of chances of industrialization for backward countries—quite the contrary. However, his theory conveyed a fundamental (albeit implicit) refutation of the liberal, Eurocentric narrative of civilization. From nineteenth-century liberals to Rostow, it was assumed that each nation had to pursue economic development by following the path of the more advanced, and that this would lead to progress in other non-economic aspects. Failure to develop was always blamed on obstacles and incapacities of the “apprentices,” while the “success” of the West was narrated as a self-centered story. By presenting European history as a unity (not a uniform, homogeneous unity, but a diversified, graduated unity), Gerschenkron was illuminating the relational nature of the process of development. In other words, although he presented this notion in a rather neutral way, he was pointing to the fact that the mere presence of first-comers had serious and inevitable effects on the development of the latecomers, which may include negative ones for social and political institutions (e.g., serfdom and despotism). Gerschenkron arrived at this notion by refusing to accept that Russia was not part of Europe; it was the view from the periphery—and undoubtedly also his impressive knowledge of the Russian intellectual tradition—that enabled such a crucial change of perspective.

Gerschenkron’s approach had a significant impact throughout the world. Among others, it had a strong influence on Albert O. Hirschman, author of The Strategy of Economic Development (1959), a landmark of development economics and one of the first attacks on the “conventional wisdom” established in earlier works. One of the key contributions of this book to the twentieth-century debate was the redefinition of the concept of development. According to Hirschman, the conventional wisdom seeks to explain backwardness by locating the “absence or scarcity of this or that human type or factor of production” or of certain missing “prerequisites.” The implicit idea is that the problem of the “missing component, be it capital, entrepreneurship, or technical knowledge,” may be solved “by injecting that component from the outside or by looking for ways and means of producing it within the country.” Such an approach fails to notice the “specific characteristic” of underdeveloped nations; namely, that they are “latecomers.” This condition “is bound to make their development into a less spontaneous and more deliberate process than was the case where the process first occurred.” Some theories of development “fail to include in their structures this fundamental fact of contact between the advanced and backward countries”: “Once economic progress in the pioneer country is a visible reality, the strength or the desire to imitate, to follow suit, to catch up obviously becomes an important determinant of what will happen among the non-pioneers.” The study of development, then, should focus not so much on “finding optimal combinations of given resources and factors of production” as on understanding the social and political circumstances under which a society manages to enlist “for development purposes resources and abilities that are hidden, scattered, or badly utilized.” Development, in Hirschman’s definition, is “a process of drawing together a variety of conditionally available resources and latent abilities.” This calls for the study and understanding of specific national circumstances; it is local “strategies” that are needed, rather than general recipes on capital formation. Hirschman quotes Gerschenkron’s idea of “relative backwardness” as the main source of inspiration (presumably under this influence he also used the ideas of the nineteenth-century Russian intelligentsia as an example of tensions between social realities and expectations for the future) (Hirschman Reference Gerschenkron1959, pp. 4–13). But Hirschman took Gerschenkron’s argument one step further in the sense of a critique of Eurocentric, self-centered narratives of economic progress. His emphasis on the need of local, case-by-case knowledge, and his mistrust of abstract generalizations, were important contributions to the debate on development, especially in the formulation of the “structuralist” critique of liberal orthodoxy. Through Hirschman—who specialized himself in the Colombian economy—and via some disciples of his own, Gerschenkron’s ideas found their way into the Latin American debate, where the relational aspect of economic development acquired a distinct anti-imperialist connotation (see Gootenberg Reference FitzGerald2000).

IV. STRUCTURALISM AND THE KEYNESIAN CONNECTION

Strictly speaking, a few years before Gerschenkron’s seminal essay, the “structuralist” school had already initiated theoretical investigations that illuminated the fundamental center–periphery relatedness in the capitalist world economy. “Structuralism” refers to a current of thought aimed at identifying and studying local economic structures that impede the supposedly “normal” functioning of the economy in the less-developed countries. The discovery of such structures led structuralists to the rejection of classical and neoclassical prescriptions, and cast doubts on the idea of a single path of economic development for all nations. Structuralism was truly a Latin American intellectual creation. Raúl Prebisch—the Argentinean economist who laid its foundations in the 1940s—was mainly influenced by John Maynard Keynes, and his case studies and empirical examples were taken from Latin American realities. The same applies to his first disciples; neither the influence of Russian intellectuals nor any visible use of the Russian case can be traced in their early works. However, there are some indirect connections that are worth exploring.

Although Keynes himself had little to say about the problems of the less-developed countries, his theoretical contributions were crucial in the emergence of development economics. The intellectual connection between the two bodies of scholarship was clearly explained in 1961 by Celso Furtado, one of the founding fathers of structuralism. Keynesianism was a doctrine of market failure: the idea that central agencies should implement strong “countercyclical” measures of a non-monetary type derives from the realization that, contrary to neoclassical wisdom, the price mechanism did not always bring about the most rational use of productive resources. And it was as “a byproduct of business cycle theories that ideas about the process of economic development made their appearance.” Indeed,

From that need, as Furtado acknowledged, arose the widespread interest then shown in studies of capital accumulation, of capital–output ratio, and in efforts to measure national wealth. It also explained the great significance of “input–output studies,” for they afford “a clearer insight into relationships of interdependence throughout the economic system” (Furtado Reference Ekhtiar1964, pp. 57–59). In this area of contact between the interests arising from Keynesianism and from development economics, there was a visible contribution of Russian thinking. The names of Simon Kuznets and Wassily Leontief—two Russian émigré economists—immediately come to mind. Besides his fundamental empirical research on developing economies, the former was in charge of collecting and organizing national income accounts in the US, and carried on pioneering studies on business cycles; the latter is known as the father of input–output analysis. The influence of an older tradition of Russian economic thinking on both authors has been documented.Footnote ⁴ But there are also other, more direct connections between the Keynesian revolution and things Russian.

If Furtado is right, business cycles theories, with their emphasis on the discontinuous nature of growth and its implicit mistrust in the self-regulating price mechanism, played a fundamental role in the making of the Keynesian economic vision and, by extension, in the emergence of development economics. Although W.S. Jevons and Clement Juglar had noted the existence of business cycles in the 1860s, the beginnings of business cycles analysis are related to the works published thirty years later by the Russian economist Mikhail Tugan-Baranovsky. Tugan’s pioneer description and explanation of business cycles located its causes, among other factors, in the maldistribution of income (he believed that crises were provoked by changes in the formation and consumption of capital) and in the effects of diverse types of State policies, which created the framework for particular cyclical patterns to occur. His work had a major direct impact on Keynesianism: in his Treatise on Money (1930), Keynes wrote, in regards to business cycle theory, that he was “in strong sympathy with the school of writers … of which Tugan-Baranovsky was the first and most original.” Alvin Hansen, the main advocate of Keynesianism in the US, was even more enthusiastic about the Russian’s contribution. As Vincent Barnett has noted, this suggests that some aspects of both British and American Keynesianism might have originated in Tugan’s work (or at least been influenced by it). In addition to his influence on Keynes and Hansen, Tugan had a direct influence on the work of leading economists of the twentieth century, such as Wesley Mitchell and Dennis Robertson, and especially on Michal Kalecki’s famous attention to disproportionality across industrial branches (Barnett 2001a and 2001b).

Among those who for the first time applied Keynesian ideas to the problems of economic development, the Polish economist Kalecki was not the only one of eastern or central European origins. The list also includes Paul Rosenstein-Rodan, Kurt Mandelbaum, Thomas Balogh, and Nicholas Kaldor. This should not be surprising, as east–central Europe was, like Russia, an area where the intellectual challenges of economic development were felt at an early stage. Indeed, the similar dilemmas that both had to face at the turn of the century provided fertile soil for the circulation of ideas between Russia and east–central Europe. The political and economic debates between liberals, Marxists, and “populists” in Russia, especially those involving the fate of peasant production, were of utmost importance in countries with large peasantries like Poland or Hungary. In the interwar period, the collapse of the Ottoman and Austro-Hungarian empires provided the opportunity for the new national governments to implement vast programs of land reform that benefited the peasants and small farmers. However, after this initial drive, the new regimes tended to favor measures of rapid industrialization that invariably called for the transference of surplus from the countryside to the urban economy.Footnote ⁵ These measures were resisted by the large agrarian parties in several east–central European countries, some of which were close to forming government (they even held or shared power in Bulgaria and Czechoslovakia). Their political programs usually involved the protection of rural, regional, cooperative, and small-scale production, as opposed to the “urban bias” of governmental protectionist, capital-intensive policies. There parties, which converged in the “Green International” in 1921, were extraordinary vehicles for the dissemination of Russian unorthodox and “neo-populist” economic views throughout east–central Europe (Kitching Reference Gowdy and Mesner1989, pp. 56–61). For example, in Romania, as Joseph Love has argued, the local “populist” and Marxist movements paid much attention to ideas coming from Russia, where many of their intellectuals had spent their formative years. Thus, from the 1890s onwards, Rumania developed a solid tradition of critique of liberalism, in which Russian economic debates had a major influence. As part of this intellectual environment, on the eve of the First World War, Rumanian economists had already developed sophisticated and original ideas regarding economic development. In the 1910s and 1920s, the investigations of Aleksandr Chayanov in Russia inspired similar enquiries on peasant economy in several east–central European countries. From these concerns emerged pioneering theorizations of the phenomenon of “disguised unemployment”—a concept that was to be fundamental to Keynesian economics—before the Western discovery of it (conventionally dated in a 1936 publication by Joan Robinson). In the late 1920s, the prominent Rumanian economist Mihail Manoilescu presented ideas on the need of industrial protectionism and an analysis of the structure of world markets that anticipated later theorizations of “unequal exchange” (his expression) both in international trade between center and periphery, and internally, between more and less advanced regions within the less-developed countries (i.e., a notion of “internal colonialism” avant la lettre) (Love Reference Ho1996, pp. 29, 31, 63–64, 68, 71, 84, 87).

This area of early intersection between development and Keynesian economics still awaits further investigation. It is clear, however, that the circulation of ideas was not only in one way. Taking into account the achievements and originality of economic thinking in east–central Europe in the interwar period, it should not come as a surprise that Michal Kalecki—who, as a young leftist in Poland, was well in touch with unorthodox economic debates—claimed precedence for several of the discoveries that made Keynes famous, which he had published earlier but which did not gain him international acclaim as they were not presented in the language of the mainstream of Western economics (see, for example, Chapple Reference Barnett1995, pp. 525–538). In any case, it is worth pointing out that there was also a connection between the east–central debates and the later Latin American structuralism. It is clear that the most important influence on Prebisch was that of Keynes, and that the famous center–periphery distinction that made Prebisch famous was probably inspired by some remarks of Werner Sombart. But it is not unlikely, as Joseph Love has argued, that he was also aware of Manoilescu’s work on international exchange, which was available in Spanish, French, and Portuguese, and was very well known in Brazil and Chile (although less so in Argentina). Although there is no empirical evidence of a direct influence, the similarity between Prebisch and the Rumanian was noted by some commentators already in 1950. Later contacts between Prebisch’s Economic Commission for Latin America and east–central European Keynesians like Kaldor, Kalecki, and Balogh are well documented. Likewise, pillars of structuralism like Osvaldo Sunkel and Juan Noyola Vázquez acknowledged that an article on the issue of capital formation and the inelasticity of agrarian production by Michal Kalecki, published in 1954 in Mexico’s El Trimestre Económico, had a major influence in the shaping of their ideas (Love Reference Ho1996, pp. 11, 78, 102, 106–107, 112–114, 126–136, 160–161; see also FitzGerald Reference Dannequin and Arnaud1990).

V. FROM MARXISM TO POST-MARXISM

Marx’s later doubts on the notion of lineal development, and his examination of the Russian case, remained unknown to most Marxists for much of the twentieth century (see Adamovsky Reference Adamovsky2010). As many commentators have noted, the basic assumptions of the Marxist tradition regarding historical evolution had more than one aspect in common with those of the liberals. Despite the late Marx’s discoveries, both traditions were in coincidence regarding history as a lineal process that went from simple ways of economic organization to higher and more complex forms of production. The notion that this process was marked by certain “stages” more or less equal for all societies was also a shared one.Footnote ⁶ Even the progressive nature of capitalist development and the role of the bourgeoisie as agent of civilization were basic tenets of liberalism later held by Marxism as true. Although different currents within the Marxist tradition were already distinguishable in the first three decades of the twentieth century, until then they all agreed on these basic assumptions.

As we have noted earlier in this article, without abandoning this Eurocentric master narrative of progress, Russian Marxists had added the notion that the weakness of the bourgeoisie in their country prevented it from fulfilling its historical mission. The debate on “imperialism” also cast doubts on the ability of capitalism to perform a progressive role in backward nations. When the Marxists engaged in the twentieth-century debate on economic development, these polemical notions became a fundamental stone of their contribution. The first Marxist economist to do so was Paul Baran, with his article “On the Political Economy of Backwardness” (1952), later expanded in his influential The Political Economy of Growth, published by Monthly Review in 1957. In his work, Baran took on the basic characterization of backwardness presented by pioneers such as Rosenstein-Rodan, Nurkse, and Singer.Footnote ⁷ But to this analysis he added a Marxist political dimension by arguing that capitalism, when introduced in backward feudal societies, does not bring about capitalist development but the worst combination of both stages. As local bourgeoisies have no capacity to set up truly capitalistic institutions, they accommodate to the ongoing power of traditional landowning classes and/or foreign companies. None of these social groups may encourage local development. The landowning class wastes its money in “conspicuous luxuries” rather than in productive use. The weak commercial class is nothing but a comprador “lumpenbourgeois element”: it amasses a great portion of the economic wealth, but has no interest in investing it in the industrial sector. Needless to say, the imperialistic foreign investors play no internal positive role, either. Thus, this “feudal-comprador coalition” is “inimical to progressive development.” A good example of this was the agrarian reform of Stolypin in Russia, which, far from favoring industrial development, was aimed at strengthening the landowning interests.

As the book argues that economic development is impossible for backward nations in the present phase of monopolist/imperialist capitalism, the obvious conclusion is that socialism is indispensable to draw the underdeveloped world out of backwardness. The Russian example here is important: the last part of Baran’s book discusses in extenso the Soviet experiment, as it shows that the socialist path may indeed lead to a more balanced and harmonious development than the capitalist one, even in the harsh initial conditions of the empire of the tsars. Moreover, Baran justifies Stalin’s compulsive methods by saying that “such a revolutionary break with the centuries-old backwardness of the antediluvian Russian village could not have been achieved with the consent of the irrational, illiterate, and ignorant peasantry.” As in all situations in which “the objective requirements of social development collide with the individuals’ appraisal of those requirements,” the latter may obstruct and delay the historical process; but “they cannot stop it forever” (Baran Reference Baran1957, pp. 249–300).

There are some evident echoes of the nineteenth-century debates that I have explored elsewhere in Baran’s line of reasoning. Even if he casts light on the relatedness of economic success and economic failure in the imperialist phase of capitalism, the explanation of backwardness still rests to a great extent on the argument of the absence, or weakness (or, to be more precise, the ill-formation) of the local bourgeoisie. The typically liberal contempt for the native peasantries as obstacles to change also becomes obvious. Finally, the famous eighteenth-century debate on the “two luxuries” can still be perceived in the idea of the unproductive imports and consumption habits of the upper classes. Baran’s work had an extraordinary and lasting influence on world debates on development. The Latin American “dependency” school, for example, drew much from his application of Marxist categories to the understanding of backwardness.

However, from the 1960s onwards, other radical views felt the need to go deeper in the criticism of development doctrines. The initial step undertaken by Baran and the classical “dependency” authors had been to question the implicit link between capitalism and development by pointing out that the former had not brought (and would not bring) the latter in Third World nations. However, this intellectual move had left untouched other core assumptions of classical economic thought: 1) that there is such a thing as a line of progressive development of human society; 2) that development is associated with economic growth; and 3) that capitalism was (at least until recent times) a progressive force. The evidence of the negative social and environmental effects of industrialism, development policies, and economic growth, not only in Third World countries but also on a global scale, contributed to undermining these assumptions. As the very idea of the convenience of unlimited growth began to be questioned, even the economists started to look at the peripheries with different eyes.Footnote ⁸ The discovery of the relatedness of core and periphery eventually gave way to a more thorough attack on Eurocentrism and a re-examination of the central concepts of social science—including those of traditional Marxism. Thus, reconsidering history from the viewpoint of the periphery, the perspective known as “World History,” developed by authors such as Immanuel Wallerstein, came to the conclusion that embracing “an evolutionary model of progress” had been “an enormous trap” for Marxism, and that “it is simply not true that capitalism as a historical system has represented progress over the various previous historical systems that it destroyed or transformed.” At the core of this shift of perspective was a deep change in the meaning of progress: in the views of Wallerstein and other so-called “post-Marxists,” the advance of human society is no longer associated with the growth of economic wealth, but with the removal of “realities of the exploitation of labor”—an area in which the achievements of historical capitalism have been far less categorical.Footnote ⁹

In this new understanding of development as a non-lineal process, in the questioning of the historical role of the bourgeoisie, and in this new awareness of western Europe as part of the larger, interconnected reality of world society (rather than the “norm” of development), intellectual contributions coming from the peripheries of capitalism were of crucial importance. One of the key influences in this regard came from Russia. The general disenchantment with development policies produced an increasing curiosity with regards to the economic role of the peasantry. The peasants had been traditionally considered a remnant of backward times, a force of stagnation and an obstacle to progress. Both liberal economists and Marxists had assumed that, in contact with the market economy, the subsistence peasant production typical of backward countries would soon disappear. As in the nineteenth-century debates around the 1861 Russian reform, which I have commented on in a previous article (Adamovsky Reference Adamovsky2010), the implicit idea was that development required the emergence of a new class of property-owning farmers producing for the market. Unless an undue interference of the government operated on the contrary, this was meant to be also a spontaneous outcome of the contact of the peasant world with the new opportunities offered by the market. However, the reality of the peripheries in times of decolonization seemed to prove these expectations wrong, as the peasantry stubbornly persisted in its way of life. While this fact produced nothing but impatience and irritation among some policy makers and intellectuals, it led others to seek new categories to understand the specificity of peasant economies; as part of this need, they rediscovered the works of Aleksandr Chayanov.

Chayanov, who is now universally credited as the founding father of peasant economics, was almost unknown in the West before the 1960s. He had published his works in Russia in the first quarter of the century, before falling into oblivion in a Stalinist concentration camp. The most talented theoretician of a longer (“neo-populist”) tradition of Russian studies on the peasantry, Chayanov had made some important contributions. Among others, he showed that peasant economy is a distinct type of economic system to be found in different historical formations—an awkward ubiquity from the viewpoint of lineal thinking. As such, it is endowed with an economic rationality of its own, which cannot be understood with the concepts of economic science. Unlike a capitalist firm, the fundamental unit of the peasant economy—the peasant household—does not seek to maximize profit, but rather strives to reach equilibrium between consumption needs and the amount of the effort applied to meet them. The extent to which the peasants actively engage in market exchange depends on whether that helps them reach that equilibrium at a higher level. In turn, this means that they react to market incentives in a way different from that of a capitalist firm. This rationale, according to Chayanov, creates a pattern of social mobility peculiar to the peasant world. Instead of a progressive differentiation and polarization according to class differences due to the accumulation of market advantages/disadvantages, peasant households display a pattern of mobility that is determined by the biological cycle of the family (and is, therefore, cyclical rather than cumulative).

The Western discovery of Chayanov dates from 1962 (although specialists with command of the Russian language, such as Gerschenkron and Simon Kuznets, were well aware of his work beforehand). At an international conference of economic history held in France that year, David Thorner—by then a prominent expert in peasant studies—presented the thesis that the peasant economic organization was not, as Marxists would have it, a transitory stage in the passage from feudalism to capitalism. On the contrary, Thorner argued, it should be considered an economic system in its own right, different from other “modes of production.” The first case that he analyzes to prove his point is that of Russia—an odd choice, considering that his area of expertise was India. Of all peasant economies, he argued, the Russian was the richest and most documented. Moreover, Russian scholars “were perhaps the first to formulate a theory of peasant economy.” His main source for this allegation (and indeed for his main hypothesis) was an article by A.V. Chayanov that he had found in a German journal of the 1920s. However, he also mentioned Chernyshevsky, Danielson, Hourwich, Plekhanov, Kossinsky, and Lenin. In Thorner’s article, the issue of the peasant economies was explicitly related to the debates being held elsewhere on ways of industrializing backward countries (Thorner Reference Rostow1971).

Together with Basile Kerblay —by then a scholar of the NEP period and of Soviet collectivization—Thorner set to uncover the still-unknown facts of Chayanov’s life and works. With the financial support of the American Economic Association (AEA)—where the project had attracted the interest of Bert Hoselitz—in 1966 they co-edited a volume of Chayanov’s main texts translated into English, which soon made him known to the whole world (Thorner et al. 1966).Footnote ¹⁰ Via Thorner or directly through the available translations, Chayanov’s vision became a fundamental influence in Western debates on peasant economy. To mention but a few cases, it was significant in the works of Eric Wolf, Witold Kula, and Teodor Shanin, and indeed in the very emergence of a field of “peasant studies” in the 1970s. The ideas of Chayanov and other Russian thinkers acquired immediate resonance in the new field, especially thanks to the Journal of Peasant Studies, co-founded by Shanin, the main arena for international scholarly (and also political) debates since 1973.Footnote ¹¹ As we shall see in the next section, this new understanding of the peasant’s economic rationality had a visible impact on development economics, shifting some of the attention from the problem of capital formation for rapid industrialization to more balanced and gradual policies for the improvement of rural production.

Through Thorner, Chayanov also played an important role in the critique of the Eurocentric idea of development by Wallerstein. Presenting the concept of World Economy in the theoretical introduction to the first volume of his seminal The Modern World-System (1974), Wallerstein quotes Thorner’s 1962 paper to argue that there was no “dual economy” in feudal Europe, just as there is no dual economy in the “so-called underdeveloped world” today. The peasant production was not merely for subsistence, but was linked to the commercial economy of the cities. From this follows Wallerstein’s crucial redefinition of the term “capitalism” to encompass economic structures and forms of labor that were previously considered pre-capitalist, as they were not “free” (that is, free of extra-economic constraints). Feudalism, he argues, cannot be considered, as usually, the antithesis to commerce. On the contrary, the expansion of both was a parallel process, which eventually gave birth to the modern world system. Although the connection between the expansion of feudalism and that of commerce has been so far overlooked in the main literature on medieval Europe, some historians of peripheric areas—including Russia and Poland—have already made this point. If this was the case in the periphery, as Wallerstein argues by quoting one of these historians (Claude Cahen), “we ought to reconsider, from this point of view, the history of the West itself” (Wallerstein Reference Rostow1974, pp. 18–21).

In this reconsideration of world history from the viewpoint of the periphery, the Russian case was also fundamental in the discussion of an important issue: the distinction of the three spaces of the world system. Indeed, in order to make this point, Wallerstein essayed a comparative account of the relations of Poland and Russia with the “core” area of capitalist expansion. While Poland was incorporated as a grain-producing “periphery” in the sixteenth century, Russia managed to remain outside for the time being, as her relations with Europe were not robust enough to strongly condition her economic development. As proof of this, Wallerstein points out that the Russian State became stronger at that time, while the political status of Poland and other eastern European areas declined by virtue of their inclusion in the world system. The autonomy that Russia managed to maintain at that time ensured her a position of “semiperiphery” when she was finally incorporated in the European world economy in the eighteenth century. Thus, Wallerstein made use of the Russian case for an extensive discussion of the crucial but changing role of the State in the different types of areas of the world system, and of the diversity of (not necessarily free) labor processes that it enforced in peripheric areas—another main theoretical contribution of his work. On this issue he also profited from Russian reflections on this matter, as he quotes in extenso (besides Gerschenkron) Vasilii Kliuchevsky, the eminent nineteenth-century historian who challenged the hegemony of the “Juridical School” in Russian historiography. Indeed, Kliuchevsky was the first historian to illuminate the “modernizing” function of the czarist regime, and the relationship between its ruthless legal–political features and other, more “sociological” aspects of Russia’s development (Wallerstein Reference Rostow1974, pp. 301–324).Footnote ¹²

There is still one last point in which a “Russian” viewpoint had a direct impact on Wallestein’s approach. Indeed, his explanation of the dynamics of the world system’s expansion in the 1970s drew heavily from the ideas of Nikolai Kondratiev. Like Chayanov, with whom he worked in the 1920s, Kondratiev was also a “neo-populist” economist. His initial interest was that of agricultural markets and their relation to urban economy and State policies. However, he acquired world fame as the first proponent of the notion of “long cycles”—known today as “Kondratiev cycles”—an idea he started to work on around 1922. In its final formulation, the theory presented evidence of the existence of forty-five- to sixty-year cycles in economic activity, caused by the periodical renewal of basic capital goods. The most brilliant disciple of Tugan-Baranovsky, Kondratiev argued that these long cycles could be related to other non-economic events, such as wars and revolutions. Although several heterodox economists were interested in this theory (e.g., Joseph Schumpeter and Ernest Mandel), the existence of long cycles has not been accepted by the mainstream of the economic science. However, the theory became influential in other fields, such as geography and the study of wars (Barnett Reference Barnett1998, pp. 6–9, 25, 105, 136–137). Wallerstein placed Kondratiev’s discovery in the center of world-system analysis, as he explained the incorporation of new areas to the world economy and the changes in the status of certain regions within it, as a part of the changes that enabled the resolution of each cyclical crisis. Thanks to his The Modern World-System, Wallerstein became the best-known figure of the so-called “World-History approach,” whose influence can be felt with increasing force in the social sciences.Footnote ¹³

VI. FROM DEVELOPMENT TO ECOLOGICAL ECONOMICS

Chayanov’s influence was also noticeable in a change of perspective in the debate on economic development, as it showed that the peasants were not an “irrational” and passive remnant of the past, but an economic actor whose rationale may be taken into consideration. The best example is perhaps that of Nicholas Georgescu-Roegen, who is today considered one of the most profound thinkers in modern economics. Of Rumanian origins, Georgescu was well aware of the debates among liberals, Marxists, and “neo-populists” referred to earlier in this article. He was himself a member of the Rumanian National Peasant Party in the 1930s, and had first-hand knowledge of peasant life. Taking this into account, it should not come as a surprise that Georgescu discovered the relevance of Chayanov before, and independently from, Thorner. He referred to his ideas in a 1960 article on “Economic Theory and Agrarian Economics,” published in Oxford Economic Papers, which had been originally presented as a paper at a symposium in Chicago in 1948. While complaining about the failure of both neo-classical and Marxist economists to tackle the problem of underdevelopment, in that article Georgescu presented the ideas of a “less known school of thought” aimed at studying peasant economies, which he called “agrarianism.” He traced the political trajectory of this school from its beginnings in the nineteenth-century debates on the future of the peasant communes among Russian populists and Marxists to the more recent demise of “the Agrarian parties of Eastern Europe.” Chayanov appears as its most prominent theoretician. Indeed, Georgescu picks up his conceptual achievements for a thorough mathematical discussion of the relationship between overpopulation, leisure, and marginal productivity of labor—one of the crucial issues of development economics. His conclusions not only explained the rationality behind the phenomenon of disguised unemployment, but also pointed to some interesting guidelines for development policies. Historical evidence, he argued, proves that “agriculture is an intrinsically different activity from industry” that, therefore, cannot be expected to develop according to identical lines. Backward countries cannot “follow precisely the same route that the West followed.” For agrarian countries with overpopulation, the option for individual peasant holdings and small-scale production is the best economic choice, at least in the short term. In this regard, according to Georgescu, the doctrine of agrarianism proved to be right. Moreover, historical evidence shows that only a substantial food production has led to capital accumulation, and that “agriculture can provide the basis from its own economic development.” Translating this into concrete policy guidelines, Georgescu concluded that “‘Industrialize at all costs’ is not the word of economic wisdom, at least in overpopulated agricultural countries.” But this conclusion also opened the gates for a reconsideration of the very idea of development, which was later to become Georgescu’s trademark. “Economic development,” he argued in this article, “does not mean only pure growth”; in the first place

In later works, Georgescu’s interest for Chayanov, and for the role of agriculture in balanced development, went deeper (see Dannequin and Diemer 1999).

Although Georgescu’s early 1960s contributions to developing agrarian economics were acute and insightful, they remained little noticed. His most influential ideas were those formulated during the following decade, as he developed an holistic theory of economy, society, and biophysical constraints that he called “bioeconomics.” While illuminating the complex relationship between individual decisions and the biophysical and social context of economic activity, Georgescu came to reject some of the main tenets of the neo-classics. In turn, this approach led him to a thorough critique of the imperative of economic growth. In his most important work, The Entropy Law and the Economic Process (1971), he invoked the Second Law of Thermodynamics to argue that there are biophysical limits to growth, and that human society should restrain, rather than encourage, its impulses towards increasing production and consumption. Humans, he warned, are the most significant contributors to the entropic degradation of the world, by the increasing rates of extraction of natural resources and elimination of wastes into the environment. Georgescu listed consumerism and social inequality as two of the main impediments to the radical (but indispensable) changes that he envisioned to ensure the long-run sustainability of the human species. Not surprisingly, his investigations in this regard were received with cold disdain among orthodox economists—who used to praise the Walrasian, mathematics-oriented scholar of the 1940s and 1950s. But in exchange for that, The Entropy Law laid a fundamental stone in the emergence of the field of ecological economics, and provided crucial arguments for the heterodox school known today as “evolutionary economics.” As John Gowdy and Susan Mesner have argued, Georgescu’s intellectual journey was not so much a rejection of his own ideas of the past, as it was the organic evolution of some elements of his thought that can be traced from the very beginning. Indeed, as Georgescu himself acknowledged, the roots of his dissatisfaction with the notion of homo oeconomicus and with the neoclassic theory of value, and of his concern for entropy and irreversible evolutionary change, are to be found in his early observations of the Rumanian countryside and in his 1960s Chayanovian analysis of the collective patterns of the peasant economy and its dependence on biological and seasonal cycles (Gowdy and Mesner 1998, pp. 136–156).